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The spectrum mess is returning to haunt Home Minister P.Chidambaram, who is battling uncomfortable questions from ArunJaitley, Leader of the Opposition in the Rajya Sabha, over his rolein the Aircel-Maxis deal during the former Telecom Minister,Dayanidhi Maran's term, in addition to ongoing litigation in theSupreme Court over his role during the tenure of jailed ex-TelecomMinister, A. Raja. Alleging a link between the Foreign Investment Protection Boardclearances given to Aircel-Maxis and the business transactions ofAusbridge — a company he said was earlier owned by Mr.Chidambaram's son, Karti — Mr. Jaitley claimed that in 2006,the e-mail and web address of Ausbridge Holdings and Investmentsand Advantage Strategic Consulting, which has shareholding inMaxis-Aircel, were the same. Mr. Chidambaram, however, denied thateither he or any member of his family owned any share in anytelecom company. The Opposition's attack has reopened lingering questions about Mr.Chidambaram's own contrasting conduct during 2006-07, when theMaxis' takeover of Aircel was under way, new applications werebeing submitted, and the Group of Ministers (GoM) was forced todrop spectrum pricing from its original Terms of Reference (ToRs). The record shows the Finance Ministry under Mr. Chidambarammaintained a temporary silence on the issue of spectrum pricingbeing dropped from the GoM between February 2006 and February 2007.This was the same period in which Maxis received two sets of FIPBclearances in January-March and September-October 2006, followed by14 licences between December 5 and 14, 2006, along with the promiseof linked 2G spectrum at 2001 rates on a first come, first servedbasis. Aircel paid Rs. 1,399 crore for these 14 licences which theCAG, in 2010, valued at roughly Rs. 13,000 crore. In an interesting, and now damning twist, once Aircel had securedits licences — making it a pan-India operator — andinitial approvals were in place for the Sun-Maxis deal, the FinanceMinistry suddenly went back to arguing that spectrum pricing beincluded in the ToRs of the GoM on spectrum. Within months, the Maxis group companies announced a joint venturewith Sun TV and received FIPB approvals between March 2 and 19,2007 to acquire a 20 per cent interest in Sun Direct, which isowned by the Maran family. The transaction was completed inDecember 2007 and further investments were made during 2008 and2009. The Enforcement Directorate has filed a money laundering caseagainst Mr. Maran and his brother for allegedly receiving Rs. 550crore in payoffs related to the Aircel-Maxis transaction. It is well known that as soon as Maxis approached Aircel for abuyout, Mr. Dayanidhi Maran, on January 11, 2006, approached thePrime Minister seeking the vacation of additional spectrum. Thenext day, Aircel applied for 4 new licences. On January 30, Maxis,through Global Communication, sought FIPB approval to enhance itsequity in Aircel from 26% to 73.99%. The PM agreed to Mr. DayanidhiMaran's demand and a GoM on spectrum issues was announced onFebruary 23, 2006. The ToRs of this GoM included a Section 3(e) onspectrum pricing policy. This unexpected inclusion was a big blowto Mr Maran's plans to grant spectrum to Aircel at 2001 rates.Within 5 days, Mr. Maran approached the Prime Minister, seeking thedeletion of spectrum pricing from the ToRs and submitting freshToRs. There is no evidence that Mr. Chidambaram, responsible forprotecting exchequer revenue as Finance Minister and a member ofthe GoM, offered any resistance. On March 3, Aircel applied for 3 new licences. Within 4 days,Maxis' application for FDI enhancement to 74% was approved by theFIPB. Approval by the Finance Minister followed on March 13, 2006and a formal letter issued on March 20, 2006. Soon after, on May26, 2006, Maxis stated in a filing in the Malaysian stock exchange,Bursa, that "with equity interest of 74% in Aircel(comprising of 65% direct interest and 9% indirect interest) and100% subscription of cumulative, redeemable, non-convertiblepreference shares in Deccan Digital Networks Pvt Ltd, the JVcompany incorporated in India, this effectively gives the group99.3% economic returns from the investment in Aircel." Again, on September 1, 2006, Maxis filed a fresh application fordownstream investment through Global Com. Its approval by Mr.Chidambaram was conveyed to the company on October 20, 2006. Suddenly, the Cabinet Secretariat, after a wait of 8 months, movedan Office Memorandum on November 10, 2006 to begin the process ofmodifying the ToRs for the GoM on spectrum. Mr. Maran, on November16, 2006, submitted another version of the ‘revised draft ofToR' to the Prime Minister. Within 4 days, Mr. Maran startedissuing LoIs to Aircel. On December 7, the Prime Minister approvedthe modification of the ToRs, dropping spectrum pricing — ashad been sought by the Telecom Minister. Simultaneously, Mr. Maranconverted Aircel's 14 LoIs into licences between December 5-14,2006. Even at this stage, neither Mr. Chidambaram nor the FinanceMinistry protested. Following this, in March 2007, after the Maxis-Sun TV transactionswere initiated and FIPB approvals received, the Finance Ministrysuddenly started pushing for the re-inclusion of spectrum pricingin the ToRs of the GoM on spectrum. Two Finance Secretaries, AshokJha and Dr. Subbarao, wrote multiple letters — to the DoT onMarch 28, 2007, to the Cabinet on April 19, 2007, again to the DoTon May 18 and June 6, 2007. The DoT refused to budge both duringMr. Maran's tenure through a letter of April 2, 2007, as well asduring Mr. Raja's regime — through a letter of June 15, 2007. Unanswered questions 1. Why did Mr. Chidambaram, as the Finance Minister and a Member ofthe GoM, not protest when spectrum pricing was being dropped fromthe ToRs in 2006? Is there any letter or evidence that he did? 2. If it was appropriate to keep silent during 2006 when it wasgranting FIPB clearances and the DoT was granting licences toAircel, then what changed after March 2007 for the Finance Ministryto write multiple letters for the re-inclusion of spectrum pricingin the ToRs for the GoM? 3. When the Finance Minister approved the FIPB application in March2006 and Maxis made an announcement in the Malaysian stock exchangeof receiving 99.3% of economic returns from investments in Aircel,why was this not immediately investigated, especially when thesecond application for downstream investment was placed onSeptember 1, 2006? 4. It is alleged by Mr. Jaitley that Maxis, at that time, had spentover Rs. 5,000 crore directly and indirectly for 73.99% equity. Butthe Reddy family (owners of Apollo Hospitals) invested just Rs. 34crore for their 26% share. At Mr. Jaitley's valuation of Rs. 5,000crore for 73.99%, the Reddy family's Rs. 34 crore translates into amere 0.7% equity share, justifying perfectly Maxis' claim of 99.3%returns. Why has this not been investigated?. The e-commerce company in China offers quality products such as Building Curved Staircase , Solid Timber Door Manufacturer, and more. For more , please visit Exterior Timber Doors today!
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